Spain reneges on Solar Power guarantees

Spain was once one of the bright spots (pun intended) in the solar power generating world. Generous guarantees by the goverment brought it close to 20% reliance on renewable energy. Investors big and small poured money into solar power projects. Only one thing was missing: the money to pay for all this.

When the federal goverment guaranteed men like Justo Rodriguez that it would buy the electricity he generated at a fixed price for the next 25 years, he mortgaged two houses and his workshop to buy the equipment. He, in turn, guaranteed his banks that he would return the money they lent him.

Justo Cruz Rodríguez faces ruin after investing in solar power in the Spanish town of Águilas. Samuel Aranda for The New York Time

Abruptly, the Spanish govenment told him that they would not pay anywhere near as much for the power he generates and, to add insult to injury, wants to charge him for the power he generates and uses himself.

Countries must operate on a rule of law and gurantees made by the government cannot be withdrawn when people are investing based on those guarantees. This is just one more step into anarchy that the PIGS (Portugal, Italy, Greece, Spain) countries are falling into.

Read the details in this article.